Industry Analysis Essay
INDUSTRY ANALYSIS OF COLLEGES AND UNIVERSITIES IN THE
Strategic Management - MBC 645
May 11, 2016
This is an industry analysis paper of the Colleges and Universities in the United States and it is important to begin with a definition. A goal of an industry definition and boundaries scope must not be too narrow or broadly defined because this will alter the scope of the analysis and result in a skewed conclusion. I will begin by differentiating between non-profits and for-profits businesses due to the different strategies involved within management in attempt to maintain the scope of this analysis. At first thought this seems …show more content…
According to Ibis World (McCormack) in 2016 Colleges and Universities are forecasted to receive total revenues of $535.1 Billion and total profits of $84.5 Billion. These numbers include a total of 1,892 institutions with wages over $280 Billion (Figure 1). The annual growth over the next five years is projected to reach 2.2% compared to the annual growth in the previous 5 years of 1.0% (Figure). One explanation for the slower growth in the previous five years is due to the economic recession. The economy has been recovering at different paces and will allow for adequate growth in the future. Also, it is worthy to note the external drivers that promote growth rates and revenue cash flows. A few key external drivers of this industry include: government funding, high school retention rates, S&P 500 and the national unemployment rate (McCormack).
In brief, the various government types of funding have historically fluctuated with the economy. For example, government funding has decreased by 4.7% in 2013 due to recessions as government agencies struggled to balance and allocate the education budget (Figure 2). As Colleges and Universities require a high school diploma or equivalent for